Moolah Diaries – Earmarked Funds

I dropped out of the habit of writing about Moolah but it’s been ticking along doing what I need it to for a fair while with a few additions here and there. Recently I spent a chunk of time adding the ability to ‘earmark’ money for a particular use.

My main motivation is that we’re planning a family trip to Germany at the end of the year and I want to be able to set aside money through the year as we save for it. Various things will need to be paid upfront and those expense need to come out of the earmarked funds. I could track that with a new account for the savings, but since I’m not setting up a new bank account the balances wouldn’t match up and I’d spend a lot of time transferring money in and out of the holiday account.

So I’ve introduced ‘Earmark’ as a new type of entity. In many ways they’re similar to accounts, but a single transaction can have both an account and an earmark, affecting the balance of both. So the transaction recording paying for our flights has the credit card as it’s account and the earmark set to the Germany holiday. It acts as an expense reducing the balance of both the account and the earmark.

Similarly, my wife’s income goes into our bank account and for this year I’m also earmarking it for Germany so it increases the bank balance (we did actually get the cash) and also increases the balance of the earmark.

This sounds like double counting, but the earmark balance is not included in the net worth which is still just the sum of account balances. The UI also displays “available funds” which is the sum of account balances less the sum of earmark balances.

The result of this is that an expense with an account and earmark reduces the balance of the account (we now have less money in total) but also reduces the balance of the earmark so there is less money set aside for that purpose. As a result the net worth is reduced but the available funds remains the same because the cost came out of our reserved funds.

Income with an account and an earmark increases the balance of both, so net worth goes up but available funds stays the same – those funds have been earmarked for that purpose and aren’t available for general use.

But what if we want to earmark a fixed amount per month separately to any actual income? To support that, Moolah allows creating transactions with an earmark but no account. In that case we’re recording the allocation of funds but with no actual cash movement.

The feature set is rounded out by tracking how much has been saved (total of income) and how much has been spent (total of expenses), a savings target and target date and providing some visualisations to show savings progress vs time and expense breakdowns.